FedEx: shares slightly up despite lackluster results
(CercleFinance.com) - FedEx shares were slightly up in morning trading on Wednesday, even though the US parcel delivery company said that the past fiscal year was a year of "challenge.
Revenue for the fourth quarter ended 31 May rose to 17.8 billion dollars, from 17.3 billion dollars a year ago, the group said late on Tuesday.
However, its operating income fell to 1.32 billion dollars, from 1.33 billion dollars a year earlier, while the company incurred a net quarterly loss of close to 2 billion dollars.
FedEx also warned that its fiscal 2020 performance will be negatively affected by continued weakness in global trading conditions and industrial production, and said it would adjust its costs to mitigate revenue weakness.
"On a longer term view, we continue to think that FedEx is well positioned strategically to benefit from the evolving domestic parcel market," analysts at Credit Suisse said.
"We view its alignment with large, traditional retailers (such as Walmart and Target) that are looking for ways to compete with Amazon as a positive in the long run," they noted.
"The problem with the parcel stocks is that there always seems to be more and more costs," Credit Suisse pointed out.
Investors seemed to hesitate. FedEx shares are up just 1% on the New York Stock Exchange. They have fallen by 4.2% so far this year.
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